PORTAGE PARK — Mayor Rahm Emanuel on Wednesday approved a plan to use $2 million in city funds to turn a long-vacant bank building into a Binny’s Beverage Depot and gym while saving a historic theater and creating space for nonprofit arts organizations.

The approximately $16 million proposal calls for the lower floors of the former Bank of America building at 4901 W. Irving Park Road to be transformed into the first Northwest Side Binny’s and the first Retro Fitness gym in Chicago.

In addition, a new Elly’s Pancake House Restaurant will be built at 4925 W. Irving Park Road, next to the former bank building, officials said. The chain also has a location on the Jefferson Park-Gladstone Park border.

The development will also include Wisconsin-based Culver’s — known for its “butter burgers” and frozen custard — which plans to open a restaurant with a drive-thru window west of the former bank building where a tire shop used to operate at 4939 W. Irving Park Road.

The theater will provide a significant “public benefit” to Six Corners, and merits a city subsidy, said Owen Brugh, chief of staff to Ald. John Arena (45th.)

“This will drive evening and weekend traffic to the area, and continue its revitalization,” Brugh said.

The redevelopment will benefit the community by “filling a hole in our shopping district,” the alderman has said.

Initially, owner Charles Cui asked city officials for a $4 million subsidy from the Portage Park TIF district, Arena said.

TIF districts capture all growth in the property tax base in a designated area for a set period of time, usually 20 years or more, and divert it into a special fund for projects designed to spur redevelopment and eradicate blight.

Arena endorsed a subsidy of $2.5 million, which was later reduced to $2 million after monthsof negotiations.

With Emanuel’s approval, the measure, which was introduced Wednesday, is expected to be approved by the Chicago City Council on March 16.

The project would create between 75-100 construction jobs and 100-150 full-time jobs and generate approximately $300,000 in annual sales tax revenue for the city, development officials said.

The proposed development “honors the intent” of the master plan approved by the city in 2013, Arena said.

Efforts to revitalize the area around Irving Park Road and Cicero and Milwaukee avenues, which was once Chicago’s premier shopping district outside the Loop, hinge on the redevelopment of the former bank building, according to the master plan.

The redevelopment of the bank building has proceeded in fits and starts since April 2013, when Mike Bousis, the owner of Cermak Fresh Markets, paid $2.9 million for the building and announced that he planned to tear it down and build a new full-service grocery store on Six Corners’ western edge.

But Bousis clashed with Arena, who urged Bousis to change his plans and save the second-floor theater, which was once home to the Northwest Chicago Film Society. Movies were shown there from 1971 to 2010, and arts supporters wanted it to be part of the emerging arts and entertainment district at Six Corners.

But that discussion — which became tense at times with Bousis threatening to tear down the building and wait until after the 2015 aldermanic election to apply for a zoning change — meant progress ground to a halt, slowing the shopping district’s revitalization.

Bousis later sold the property to Cui, who agreed to preserve the theater and redevelop the existing building, which was gutted by vandals after Bank of America closed the branch in 2011.

Construction on the redevelopment plan could start as soon as April, Cui said.